According to KG Zeroin’s MP Doctor (formerly Marketpoint), ILDONG PHARM closed at 16,490 won on the Korea Exchange (KOSPI) that day, up 13.72% (1,990 won) from the previous trading day. During the session, the stock rose as high as 18,000 won, with the gain exceeding 24% at one point.
The apparent catalyst for the buying momentum that day was the ruling in a patent lawsuit related to linagliptin generics. On the 13th of last month, the Patent Court dismissed all of Boehringer Ingelheim’s claims in a lawsuit seeking the revocation of a patent decision regarding “anti-diabetic therapies with vasoprotective and cardioprotective effects,” which the company had filed against 17 domestic pharmaceutical companies.
This patent protects the use of linagliptin—an active ingredient in diabetes treatments—for patients with type 2 diabetes who have cardiovascular disease or are at high risk of developing it. The scope of application includes not only patients with a history of conditions such as myocardial infarction, coronary artery disease, or stroke, but also elderly patients aged 70 or older and those with risk factors such as hypertension, smoking, and obesity.
This patent remains in effect until November 2031. Even after the substance patent protecting linagliptin itself expired in June 2024, the follow-on patent covering specific patient groups and therapeutic uses remained in force.
The litigation began with invalidation proceedings filed by domestic pharmaceutical companies against this patent. ILDONG PHARM, Boryung(003850), and DaewonPharmaceutical(003220) filed a petition with the Korean Intellectual Property Trial and Appeal Board in June 2024, requesting that the patent be invalidated. They contested the validity of the patent itself, arguing that if this follow-on use patent remained valid, it could hinder the sale of generic products and business expansion.
The Patent Trial and Appeal Board consolidated and heard the invalidity proceedings filed separately by 17 domestic pharmaceutical companies, and in April of last year, ruled the patent registration invalid. Subsequently, the patent holder, Boehringer, filed a lawsuit with the Patent Court seeking to overturn the decision, but this appeal was also rejected.
The crux of the ruling is not that linagliptin is ineffective in treating diabetes. Rather, it lies in the fact that Boehringer did not sufficiently prove that the drug has a specific efficacy for certain patients at high risk of cardiovascular disease.
The court determined that while the patent specification contained data confirming the blood glucose-lowering effect in animal models of diabetes and the safety in animal models of cardiovascular disease, it lacked specific data demonstrating therapeutic efficacy in high-risk diabetic patients with cardiovascular disease—the very population targeted by the patent.
In particular, the court pointed out that while the specification merely outlined plans to investigate the relevant effects in follow-up studies, it did not present “specific and objective experimental results” demonstrating how linagliptin affected the cardiovascular risk of those patients. In simple terms, the court held that it was difficult to grant patent rights as if a specific therapeutic effect had already been discovered based solely on plans for future clinical trials to verify efficacy.
The decision to specifically target high-risk cardiovascular patients as a separate treatment group was also not recognized as a novel concept. The court stated, “It is already widely known in the field that a significant number of patients with type 2 diabetes have cardiovascular disease or are at risk of developing it.” Given that existing DPP-4 inhibitors were known to have relatively few cardiovascular side effects, the court ruled that any expert could have easily conceived of administering linagliptin to such patients.
Based on this, the court concluded that the patent specification alone did not sufficiently substantiate a special therapeutic effect, and since the treatment method in question could be easily derived from existing research, it was difficult to recognize its inventive step.
Industry observers assess that this ruling has reduced the legal uncertainty surrounding the product’s remaining use patents. ILDONG PHARM currently markets the linagliptin generic “Linazetin Tablets” and the metformin combination drug “Linazetin Duo Tablets.”
However, the ruling is not yet final, as Boehringer Ingelheim has until the 4th to file an appeal with the Supreme Court. Nor have all of Boehringer Ingelheim’s patents been invalidated. Although some pharmaceutical companies attempted to invalidate three formulation patents set to expire next April, the Patent Court dismissed all of their claims.
Some observers note that the patent victory alone does not fully explain the extent of ILDONG PHARM’s rise today. In fact, Boryung and JEIL PHARM(271980), which were also involved in the same lawsuit, fell 2.21% and 4.56%, respectively, while DaewonPharmaceutical rose only 1.63%.
A pharmaceutical industry official stated, “Invalidating a single patent is merely one step in the product commercialization process, and how much revenue is actually generated after launch is a separate issue,” adding, “Since this case involved multiple pharmaceutical companies, it is difficult to attribute the sharp rise in a specific company’s stock price solely to a single ruling.”
Some analysts suggest that the particularly sharp rise in ILDONG PHARM’s stock price was partly driven by expectations surrounding the technology export of “ID110521156,” an oral glucagon-like peptide-1 (GLP-1) obesity treatment candidate.
ID110521156 demonstrated an average weight loss of 9.9% and a maximum of 13.8% after four weeks in the 200 mg dose group of a Phase 1 clinical trial. Based on clinical data obtained through participation in events such as Bio USA this year, ILDONG PHARM has been exploring possibilities for licensing out and joint development with global pharmaceutical companies. It is reported that ILDONG PHARM is currently proceeding with follow-up commercialization efforts, including Phase 2 clinical trials, while simultaneously engaging in discussions regarding licensing out and joint development.
Another industry insider explained, “Since stock prices are beyond a company’s control, it is difficult to pinpoint a single reason for the rise unless the actual buyers are identified,” adding, “It is reasonable to view this as a result of increased investor sentiment driven by the combination of previously reported expectations for the technology export of an obesity treatment and the patent ruling.”
